No Mercy No Malice
The Case Against a Microsoft-TikTok Merger
The Chinese will not be bullied into selling a global internet asset on the cheap
CNN: “Section4, the online education startup founded by NYU professor Scott Galloway, is in discussions to acquire TikTok.”
It. Could. Happen.
Hey, why not? The probability that Section4 will absorb the social platform is only slightly less likely than Microsoft or Twitter, or anybody else acquiring it. Expect several other investor relations departments to leak to the WSJ/NYT that they are in discussions to acquire TikTok, as it’s easier to create billions in value by calling the WSJ and going on background than by, you know, actually creating value.
Microsoft added Boeing to its market cap ($95 billion) on the notion that the fastest-growing social platform in the world would be served up on a platter, under the specter of a national ban yielding Satya Yuga leverage. After immigrating to the U.S. on a student visa and putting himself in a place to shepherd the creation of hundreds of billions in shareholder value, being asked by a failed, silver-spoon bigot impersonating the chair of Microsoft’s board likely inspires one emotion in Mr. Nadella: the need to shower. The president telling Satya to acquire TikTok is similar to Joel Glazer calling Tom Brady from a Florida day spa and demanding he pass the ball more to Gronkowski. Yeah, thanks for the call.
Twitter’s stock rose 5% after news broke of its interest in the app, though shares closed lower as the market likely realized that Twitter doesn’t have the balance sheet or the leadership for a merger of this size. Initially, I loved this idea. Twitter needs a CEO, growth, and product innovation, and the Chinese would, in a man-bites-dog scenario, be effectively acquiring Twitter — they would own the majority of the shares in newco. Kind of a jiujitsu SPAC inversion kind of thing.
For a hot minute, I convinced myself Disney should acquire TikTok — U.S.-Sino chops, the balance sheet, an ability to acquire and scale media…
